April 20, 2021

N50bn FAAC shortfall: We declined govs’ request to borrow from CBN — FG

Petroleum subsidy

Zainab Ahmed

Zainab Ahmed

…March allocation fell by N50 billion; govs asked to live within their means — FINANCE MINISTER

…Adds govt aims to triple revenue ration to 15% of GDP

…NGF deliberately mute on the issue of printing money — FAYEMI

By Johnbosco Agbakwuru & Prince Okafor

Controversy over claims by Edo State Governor, Godwin Obaseki, that the Federal Government printed N60 billion to augment March allocation from the federation account, took a different dimension yesterday, as the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, revealed that governors actually wanted to borrow money from the Central Bank of Nigeria, CBN, for the shortfall, saying government turned down the request.

Governor Obaseki had said two weeks ago: ”When we got FAAC for March, the federal government printed additional N50-N60 billion to top-up for us to share.

“This April, we will go to Abuja and share. By the end of this year, our total borrowings are going to be within N15-N16 trillion.”

This claim has generated much controversy in the polity, with the Federal Government insisting that the governor lied in his claim.

Godwin Emefiele, governor of CBN, had also dismissed Obaseki’s claim, describing it as “unfortunate and totally inappropriate.”

The development also pitted governors of ruling All Progressives Congress, APC, against their Peoples Democratic Party, PDP, counterparts weekend, with governors on both sides of the divide defending their own.

FG turned down request by govs to borrow from CBN — Finance Minister

But speaking on the issue in a Nigerian Television Authority, NTA, breakfast programme, Good Morning Nigeria, yesterday, the minister said the Federal Government turned down a request by state governors to borrow from the Central Bank of Nigeria, CBN, to augment the N50 billion federation account allocation committee, FAAC, shortfall in March.

Ahmed said that whenever there was reduction in federal allocation, the Federal Government took money from some reserve accounts, but noted that in the case of March allocation which fell by N50 billion, all state governments were asked to manage their resources.

She said:  “It is a difficult time, I can explain to you how difficult it is not just for the Federal Government but also for the state; we see increasing reduction in our FAAC revenue.

“In the month of March, we had a shortfall at FAAC that is almost about N50 billion and we did not have enough accrual in any of those accounts. The states, to be honest, wanted us to borrow from the Central Bank but we resisted, we just told everybody to go back to live within what they had.

“So it was very surprising for us when we heard a sitting governor saying that CBN has printed money for FAAC. That was very unfortunate because it is not true.

“As a nation, the federal, state and local governments must review expenditure patterns. We are spending too much and we are not generating enough.”

Mrs Ahmed noted that Nigeria emerged from its second recession in four years in the fourth quarter, but lamented that revenues remained subdued as a fall in crude prices curbed the main source of income for the nation.

Ahmed said government’s aim was to triple its revenue ratio to 15 per cent of gross domestic product.

“After revenue collapsed during the last oil shock of 2015, Nigeria turned to the Central Bank, borrowing about a third of its debt to cover a budget deficit that tripled during that time,” Ahmed had said, adding that the government would limit deficit monetization and convert those loans into long-term notes.

NGF deliberately mute on the issue — Fayemi

Meanwhile, as controversy over the alleged printing of N60 billion rages, the Nigeria Governors Forum, NGF, yesterday, said that its silence on the matter was deliberate.

Chairman of NGF and governor of Ekiti State, Dr Kayode Fayemi, stated this yesterday while fielding questions from State House correspondents after a meeting with Chief of Staff to the President, Professor Ibrahim Gambari, in Abuja.

Dr. Fayemi was flanked by the Chairman of the Peoples Democratic Party, Governors Forum and Vice Chairman of NGF, as well as governor of Sokoto State, Rt. Hon. Aminu Tambuwal, Chairman of the Progressive Governors Forum and governor of Kebbi State, Atiku Bagudu, Chairman of the Northern Governors Forum and Governor of Plateau State, Rt. Hon. Simon Lalong as well as the Chairman of the Conference of Speakers.

When Governor Tambuwal was asked to comment on the position of the PDP Governors Forum over   the attack on the Edo State governor, Mr. Godwin Obaseki, for saying the CBN printed N60 billion to be shared at FAAC, Dr. Fayemi interjected, saying he could as well answer the question as Chairman of NGF on behalf of Tambuwal who is the Vice Chairman.

He said: “He (Tambuwal) is not here as Chairman of PDP Governors Forum, I can even talk on behalf of him here, he is here as my Vice-Chairman, and have you heard any statement from the NGF on this?”

Asked why the NGF decided not to issue any statement on the matter, he said: “It is because this is not an issue that requires a statement from the governors; the Minister of Finance has dealt with it, the issue is out there for you to deal with.”

Vanguard News Nigeria